In this post
Introduction
The world has rapidly changed over the last few centuries, especially in the 21st Century. We can instantly communicate with others around the globe with our smartphones and tablets, easily purchase goods from other countries and hop on a plane to visit distant lands, which is all possible thanks to globalisation.
According to BBC Bitesize, “Globalisation is the way the world has become more interconnected. It refers to how people communicate as well as world trade, international investment and the sharing of ideas”. It has allowed us to freely move ideas, goods, people and services between countries and globally. Just imagine how long it would have taken to travel to America centuries ago; it would have taken weeks.
In today’s world, globalisation is hugely relevant. It has made it easier to communicate, travel and access different products and services worldwide and has greatly changed economies, societies and the natural environment (United Nations). It has also increased interconnectedness and interdependence among countries, primarily regarding economics, politics, culture and technology.
Globalisation can have significant effects on businesses. On the one hand, it can bring many benefits, such as accessing new markets, sourcing materials, lowering costs and diversification. On the other hand, it can bring many challenges, such as increased competition, navigating cultural differences and regulations and pressure on quality and price.
It is essential for students to understand globalisation from a GCSE business studies perspective, as it provides them with insights into how businesses operate within an interconnected world and the impacts, challenges and opportunities they face in a global market. It will also enable them to develop and apply their knowledge, understanding and skills to contemporary issues in various local, national and global contexts. Overall, it lays a foundation for further studies in business and their potential careers.
If you are a student studying for GCSE business studies or someone interested in globalisation, this blog will discuss globalisation’s benefits, challenges and impacts on various businesses. It will also cover government and international organisations’ roles and future trends.

Understanding Globalisation
Looking at key components and historical context is important in understanding globalisation.
Key Components of Globalisation
Globalisation is like a web that connects the entire world, and it involves several key components that impact each other, for example:
Free Trade Agreements (FTAs)
- These are treaties between two or more countries to reduce barriers to trade, such as tariffs and import quotas.
- FTAs aim to make international trade easier and more predictable, benefiting consumers, businesses and economies.
International trade
- “Relates to the process of a business or country buying and selling products to and from other countries, often known as importingand exporting” (BBC Bitesize).
- It is a major driver of economic growth, job creation and increased market access for businesses.
Technological advancements
- Improvements in technology, especially in communication and transportation, have made it easier for people and businesses to connect and trade globally.
- Technology and communication play a vital role in connecting markets by:
- Enabling immediate information exchange.
- Making supply chain management more efficient.
- Allowing businesses to reach customers anywhere in the world.
- Enabling instant, secure financial transactions.
Political cooperation
- Countries collaborate to create and enforce trade agreements and resolve disputes through international bodies like the United Nations (UN) and the World Trade Organisation (WTO).
Cultural exchange
- Ideas, traditions, foods, culture and customs spread around the world.
- It can help businesses better understand and cater to diverse customer needs and foster a more inclusive and innovative work environment.
Migration and movement of people
- People move for jobs, better living conditions or education, bringing new talent and perspectives to different regions.
- It can also help address labour shortages.
Capital movement
- Refers to the flow of funds or investments between different assets, sectors or countries, and they should flow to where they can be most effective.
- Companies and individuals invest in foreign markets to maximise returns, which drives economic growth and innovation across borders.
Historical Context
Even though globalisation sounds like a recent phenomenon, it has been around for a long time and has deep historical roots, evolving over thousands of years. Here is a brief history of globalisation and its evolution over time:
- Early civilisations (1st century BC – 5th century AD) – trade routes like the Silk Road (connecting Asia to Europe) spread goods (e.g. silk and spices), ideas and culture.
- Age of exploration (15th – 17th centuries) – European explorers like Columbus, Vasco da Gama and Magellan expand trade routes and colonial empires, spreading global influence.
- Proto-Globalisation (1600 – 1800) – European powers establish colonies worldwide, leading to the exchange of goods, people and cultures. The rise of joint-stock companies like the British East India Company facilitates global trade.
- Industrial Revolution (18th-19th centuries) – advancements in transportation and communication technologies make global trade and interaction easier and more efficient.
- 20th Century – two World Wars, followed by the formation of international institutions, like the UN and WTO, shape global cooperation and economic policies and promoted trade.
- Digital revolution (Late 20th – Early 21st Century) – digital communication and the internet connected the world like never before, enabling instant communication and accelerating globalisation.
Globalisation has transformed the world, making it more interconnected and interdependent. It has brought opportunities and challenges, shaping how we live, work and interact.

Benefits of Globalisation for Businesses
Globalisation can bring many benefits to businesses, such as access to larger markets, economies of scale and increased innovation and technology transfer.
Access to Larger Markets
Globalisation can help businesses access larger markets and reach a global customer base. They can achieve this by:
- Conducting thorough market research – understanding each country’s laws, regulations, customers and competition to make better decisions, tailor strategies, and ensure compliance.
- Tailoring digital marketing – to local preferences and cultural nuances, e.g. translating content and using local influencers.
- Harnessing the power of social media – platforms such as LinkedIn, Facebook, Instagram and TikTok can help reach international audiences.
- Using E-commerce platforms – some platforms, such as eBay and Amazon, have systems that simplify cross-border transactions and help reach customers internationally.
- Adapting services and products to local markets – this involves customising business practices and marketing to meet specific needs and preferences of various markets, e.g. pricing, packaging and product feature changes.
- Being culturally sensitive and respectful – when tailoring marketing materials and business practices. It helps build international relationships (Robin Waite).
- Creating multilingual content – to cater to a diverse audience. Businesses could have the website content, marketing materials and customer support in multiple languages.
- Providing exceptional customer service – to stand out from the competition. It could involve offering multilingual support and local customer service teams.
- Developing strategic partnerships – partnering with local businesses and joining international trade associations can help navigate regulatory requirements and provide market insights.
Many companies have successfully expanded internationally, and some examples of case studies are as follows:
Just Eat – was founded by five Danish entrepreneurs in Denmark who launched the service in August 2001. They started by identifying and serving the most relevant markets, such as Denmark and the UK takeaway market. The company moved its HQ to London in 2008 and is currently active in 20 countries, including Spain, Italy, Canada, Belgium and India. Further information on Just Eat’s journey to success is on:
Starbucks – was founded in 1971 by Jerry Baldwin, Zev Siegl, and Gordon Bowker at Pike Place Market in Seattle. By the early 1980s, Starbucks had opened four stores in Seattle, and in 1987, they opened their first international store in Vancouver, British Columbia, Canada. As of November 2022, Starbucks operates 35,711 stores in 80 countries. Further information on Starbuck’s journey to success is on:
- Britannica Money – Starbucks.
- Starbucks Archive – Our First International Store.
- TSI – Starbucks International Strategy – A Case Study for Global Success.
There are also other case studies, such as Apple Inc., McDonald’s, Netflix, Spotify, and many more.
Economies of Scale
BBC Bitesize defines economies of scale as follows:
“Where the average costs (of production, distribution and sales) fall as the business increases the amount of product that it produces, distributes and sells.”
Globalisation allows businesses to lower costs by producing on a larger scale by:
Giving them access to a wider customer base – this enables them to decrease the cost per unit by:
- Producing and selling more products.
- Bulk purchasing of raw materials.
- Spreading fixed costs, e.g. research and development, marketing and infrastructure, and production costs over a larger number of units.
Enabling them to set up in efficient production locations – they can reduce costs and increase profit margins by establishing facilities in countries with cheaper:
- Premises and running costs.
- Raw materials.
- Labour and wages.
- Production costs.
- Resources (more abundant & cheaper).
Allowing them to source materials globally – they can find the best prices and reduce overall production costs, which can streamline supply chains.
Improving their technological and innovative capabilities – they can improve production efficiency and lower costs by adopting global best practices and advanced technologies.
Giving them regulatory and trade benefits – they can lower the costs of doing business internationally by participating in trade agreements that reduce tariffs and barriers. It reduces exporting and importing costs.
Helping them to spread economic risks – when they operate in multiple countries, it helps them spread the risk. If there are economic downturns in one region, it can be offset by growth in another. It provides more stable revenues and reduces financial risks.
Some examples of companies that have benefitted from economies of scale include:
- Brewdog – is a craft beer company that has expanded rapidly, both domestically and internationally. They scaled up their production, which enabled them to reduce costs per unit, allowing them to invest in innovative brewing techniques and expand their product range.
- Rolls-Royce – known for its luxury cars and aircraft engines, achieves economies of scale by producing high volumes of engines and components. It allows them to spread the fixed costs of research and development and manufacturing over a larger output, reducing the cost per unit.
- Tesco – is one of the largest supermarket chains in the UK. It benefits from economies of scale by purchasing goods in bulk at lower prices and operating a large number of stores globally, which allows them to offer competitive prices to customers while maintaining profitability. It also enables them to spread their overheads across numerous stores.
Increased Innovation and Technology Transfer
Innovation is critical to businesses’ success – it allows them to stand out from their competitors and adapt to changing market demands. It can also lead to new opportunities, better products and services, and create new market gaps. Globalisation can foster innovation through competition and collaboration, and it achieves this by:
Competition
- When businesses are exposed to global markets, it will increase competition with other companies and push them to continuously innovative to stay ahead of their competitors.
- Competitive pressure can drive the development of new products, services, technologies and efficiency improvements.
Collaboration
- Businesses collaborating with other global companies can promote the exchange of talent, ideas, technologies, best practices and other resources.
- Collaboration can accelerate innovative solutions and breakthroughs, which would be difficult if businesses were isolated from their global counterparts.
Competition and collaboration are crucial in pushing businesses to think creatively and adopt new approaches, and technology is also important in innovation. It allows companies to streamline operations, make better decisions and enhance customer experiences.
Technology is developing rapidly, and multinational companies (MNCs), also known as transnational corporations or TNCs, play a vital role in spreading new technologies. A company is multinational if it has facilities or assets in at least one other country and its home country.
MNCs:
- Invest heavily in research and development (R&D).
- Bring advanced technology to new local markets, thus boosting innovation and economic growth.
- Transfer knowledge, expertise, and cutting-edge technology to local firms and employees.
- Partner and collaborate with local businesses and institutions, enhancing technological advancements and global exchange of ideas.
For example, companies like Google, Apple and Microsoft have established significant R&D centres in the UK, contributing to advancements in fields such as artificial intelligence, cybersecurity and renewable energy.
BBC Bitesize has further information on MNCs.

Challenges of Globalisation for Businesses
While globalisation can benefit businesses in many ways, it can also bring many challenges, such as increased competition, cultural and ethical considerations and economic dependency.
Increased Competition
Local businesses provide products or services in their area, e.g. cafes, restaurants or clothing stores. These businesses, especially smaller ones, can face many challenges when trying to compete in a global market, such as:
- A lack of resources to compete with large multinational companies.
- Supply chain disruptions, thus impacting their ability to get the products they need.
- Pricing pressure to remain competitive.
- Limited access to cheaper labour or materials, thus hindering their ability to sell products and services at lower prices.
- Needing to constantly adapt to changing market conditions.
While competing in a global market can be challenging, some businesses can become more innovative and efficient to stay competitive. It can help them expand into new markets if they improve their products and services to stay ahead of the game.
Increased global competition can put local firms out of business if they do not remain competitive. Here are some strategies they could use to thrive in this dynamic world:
- Finding a niche – they can specialise in a specific market area to help them stand out from larger competitors.
- Being more sustainable – consumers are becoming more environmentally conscious, so businesses should adopt green initiatives to appeal to them, e.g. organic, cruelty-free, waste reduction and renewable energy.
- Offering high-quality services and products – they can stand out from the competition by choosing quality over quantity and offering something that large companies cannot replicate.
- Embracing technology – using advanced technology, e.g. artificial intelligence and automation, can help businesses streamline operations, improve efficiency and remain competitive by reducing costs and enhancing productivity.
- Creating a digital presence – building a robust website and utilising social media and e-commerce platforms can help businesses reach a wider audience and attract more customers.
- Having an effective marketing strategy and strong branding – understanding and adapting to the needs and preferences of customers and current trends is vital for businesses to attract customers, stay relevant and differentiate themselves from competitors.
- Using local knowledge – they can use their knowledge of local markets, connections, cultures and customer preferences to offer something unique that global competitors cannot easily replicate.
- Building partnerships with other businesses – they can collaborate with other businesses to exchange knowledge and ideas, tap into new markets and share resources.
- Building strong relationships with local customers – retaining customers is vital for a business’s success, and they could reward them through loyalty programs, personalised services and community engagement.
- Adapting and evolving to market changes – they can be more agile and quickly adapt to changes in the market.
Cultural and Ethical Considerations
When businesses operate internationally, there will be cultural and ethical considerations, which will bring about various challenges in these diverse environments, such as:
- Communication barriers due to language differences. It can lead to misunderstandings, affecting negotiations and day-to-day operations.
- Different cultural norms and business etiquette. It can affect business practices and relationships. What is considered courteous and respectful in one culture might be perceived differently in another.
- Varying laws and ethical standards in different countries. It can be hard to understand what is legal or acceptable.
- Diverse leadership approaches and management styles in different countries, e.g. one country may prefer collaborative decision-making, and other cultures might prefer a top-down approach. There may also be various organisational structures.
- Different customer needs and preferences. Businesses may have to adapt their marketing strategies, products and services to each country.
- Diverse teams can bring many benefits, such as new perspectives and innovation. However, it can also pose cohesion and collaboration challenges if businesses do not manage cultural differences well.
Businesses will also need to navigate ethical issues when operating in diverse cultural environments, which can include:
- Labour standards – different labour laws and enforcement in various countries can make it hard to ensure fair wages, safe working conditions and reasonable working hours. Businesses must also ensure labour and supply chains are free from human rights abuses, e.g. child or forced labour.
- Environmental standards – businesses may find it tricky to navigate local environmental regulations and minimise their environmental impact, even if the country has less stringent laws.
- Cultural sensitivity – understanding and respecting cultural differences is key to avoiding offending local customs and practices.
- Corruption – some regions have higher corruption risks. It can make it difficult for businesses to maintain ethical practices and avoid engaging in or condoning corrupt activities.
Economic Dependency
Globalisation involves increased economic interdependence, where countries’ economies rely on each other for trade. While it can bring many benefits, it can introduce risks, such as:
- Supply chain disruptions – pandemics, natural disasters and political instability can affect global supply chains, production and availability of products and services.
- Trade conflicts – tariffs, trade wars or sanctions can disrupt economic relationships and affect business operations and consumer prices.
- Economic contagion – if one country has economic problems, it can quickly affect other countries. The global financial crisis (GFC) is an example of a shock that originated abroad but impacted the UK economy and financial system (Bank of England).
- Job losses – if businesses move production to other countries where labour is cheaper, it can result in job losses, affecting the local economy and community.
- Dependency risks – if countries overly rely on others for essential services and goods, it can leave them and their economies vulnerable. If a key supplier has problems, it can have significant repercussions.
- Environmental impact – increased production and transportation associated with global supply chains can contribute to environmental degradation and climate change.
Here are some case studies of how economic crises in one country can affect businesses worldwide:
- Brexit – led to significant economic uncertainty when the UK decided to leave the European Union in 2016. UK businesses faced new trade barriers, increased costs and regulatory changes. It had a ripple effect on global supply chains, particularly in industries like automotive and pharmaceuticals that rely heavily on cross-border trade.
- The COVID-19 pandemic – caused unprecedented disruptions to global supply chains and led to shortages of essential goods worldwide. Harvard Business Review has an article on global supply chains in a post-pandemic world.
- The 2008 global financial crisis – significantly impacted the UK, even though it originated in the US. Banks in the UK faced liquidity issues, and the government had to bail out major financial institutions. It led to a credit crunch, reduced consumer spending and a recession that affected businesses in the UK and globally. The London School of Economics and Political Science has a blog on what really happens to smaller businesses in a global financial crisis.

The Impact of Globalisation on Different Types of Businesses
Globalisation can significantly impact different types of businesses, such as multinational companies (MNCs), small and medium enterprises (SMEs) and local businesses.
Multinational Companies (MNCs)
According to BBC Bitesize, globalisation has hugely increased the number of MNCs worldwide. It has also played a significant role in their rise by expanding market opportunities, promoting foreign direct investment, facilitating the spread of technology and allowing economies of scale.
Globalisation has brought many advantages to MNCs in the global market, for example:
- They can access resources, e.g. raw materials, technology and skilled labour, from different parts of the world.
- They can produce goods and services more efficiently when operating on a global scale, thus reducing costs per unit.
- They can spread operations in multiple countries, which can minimise risks when they do not have to rely on a single market.
- They can invest heavily in research and development (R&D) with significant financial resources, thus driving innovation.
- They can establish strong brands, which can give them a competitive edge in new markets.
- They can strategically locate operations to benefit from favourable regulatory environments and where there are tax incentives and lower labour costs.
Small and Medium Enterprises (SMEs)
Small and medium enterprises (SMEs) have fewer than 250 employees and a turnover of less than £36 million (Simply Business).
There are opportunities for SMEs to thrive and grow in a globalised economy, for example:
- Access to new markets – enables them to reach customers globally and expand their market potential.
- E-commerce – online platforms enable them to sell products and services internationally with minimal investment in physical infrastructure, e.g. shops.
- Cost efficiency – enables them to source resources, such as materials, at reduced costs from different countries, thus enhancing their competitiveness.
- Technology and innovation – gives them access to new ideas, technologies, and business practices from around the world, which can drive innovation in products and services.
- Collaborations – helps them form partnerships or have joint ventures with international firms, providing access to new markets, technologies, expertise and resources.
- Foreign Direct Investment (FDI) – can provide them with the capital needed to scale operations and innovate.
- Skilled workforce – allows them to access global talent pools and find workers with diverse experiences, skills and perspectives, enhancing their operations.
SMEs may also face challenges in a globalised economy. They can find it hard to compete with MNCs, may have limited resources compared to larger organisations and can be more vulnerable if there are global supply chain disruptions. They may also find it tricky to navigate cultural differences and various regulatory requirements of different countries.
Some strategies they can use to compete globally include:
- Specialising and excelling in a particular niche product or service, thus helping them stand out from larger competitors.
- Embracing technology, such as e-commerce platforms and digital tools, to reach global markets and reduce costs, e.g. on infrastructure.
- Collaborating and building strong relationships with local distributors, suppliers, other businesses and customers to gain market insights and loyalty.
- Seeing if there is any government support/resources to help them expand internationally.
- Delivering high-quality products and exceptional customer service to differentiate themselves from others who choose quantity over quality.
- Keeping innovating products or services to meet the evolving needs of global customers.
- Adapting products or services to meet local preferences, cultures and regulations.
Local Businesses
A local business is one that is classed as a small-scale enterprise and operates within a specific region, usually in a city or town. They serve particular communities in a limited catchment area and may depend heavily on local demographics and consumer behaviour (Study Rocket).
Globalisation can have positive and negative impacts on local businesses and economies.
Positive impacts
- Allows some businesses to reach international customers and increase revenue streams.
- Enables businesses to access resources, such as materials and labour, at competitive prices, which can cut down costs.
- Exposure to global markets pushes businesses to innovate and stay competitive.
- Businesses and customers can access a wider variety of goods, e.g. year-round availability of fruits and vegetables due to imports.
Negative impacts
- Small businesses may have to compete with larger businesses and MNCs, making it harder to thrive and survive.
- Wealth concentrates in globalised, tech-savvy urban areas, leaving others behind.
- Unique local identities and traditions can be overshadowed by global brands.
- Some types of businesses move their operations overseas, such as manufacturing, which can affect local economies.
Here are some examples of local businesses that have adapted to global trends:
- NanoLayr UK Ltd (was Radical Fibres) – this small business was founded in October 2019 and developed the next generation of personal protective equipment (PPE) using materials that capture viruses. Their innovation was crucial during the COVID-19 pandemic and has positioned them well in the global market. The company was acquired by NanoLayr Ltd (New Zealand) in 2022.
- Ocushield – leveraged Amazon’s global selling platform to reach customers worldwide, allowing them to tap into international markets without needing extensive logistics infrastructure. They also went on Dragon’s Den to pitch their products, which they have exported to over 72 countries (Amazon).
- The National Theatre – created a cutting-edge entertainment platform that allows performers to reach global audiences digitally. This adaptation has opened new revenue streams and expanded their reach beyond traditional theatre-goers (UKRI).

The Role of Government and International Organisations
Government and international organisations play a vital role in globalisation regarding trade policies/agreements and regulation/ protectionism.
Trade Policies and Agreements
Trade policies are a set of agreements, regulations and practices set by the government that control imports and exports and affect trade with foreign countries (Logue, 2022). Governments influence globalisation through trade policies by:
- Negotiating and setting rules on tariffs, quotas, regulations and trade agreements. Higher tariffs can protect domestic industries but might stifle international trade, while lower tariffs promote a global market.
- Determining how easily goods and services can flow across borders.
- Enforcing regulations, thus affecting how global businesses operate.
An important aspect of trade policies is trade agreements. According to the Department for Business & Trade:
“Trade agreements are made between two or more countries and set out the preferential rules for buying or selling goods or services between them.
They reduce restrictions on trade, which can make buying and selling easier and cheaper.”
Examples of trade agreements include NAFTA, the EU, USMCA and the WTO:
- The EU’s single market grants businesses access to a vast single market, making importing raw materials and exporting finished products easier.
- North American Free Trade Agreement (NAFTA) was replaced by the United States of America, Mexico and Canada (USMCA) free trade agreement.
- The World Trade Organisation (WTO) Agreements create a framework for international agreement between members, e.g. the WTO rules. If no trade agreement exists between countries, trade with that country typically occurs under World Trade Organization (WTO) rules.
Trade agreements like NAFTA (USMCA), the EU and the WTO significantly impact businesses worldwide:
Positive impacts
- They can boost cross-border trade for businesses by increasing access to different markets and reducing tariffs, which is also important for economic growth.
- They can help smooth trade relations and remove trading barriers, benefiting businesses by lowering trade costs.
- They can facilitate supply chain integration across regions.
- They provide businesses with a clear set of rules that help them to navigate global trade.
- Some agreements have dispute resolution mechanisms, e.g. the WTO, which ensures fair treatment in trade disputes and is crucial for maintaining smooth trade relations.
- They can support jobs, growth and innovation, helping businesses respond to geopolitical shocks.
Negative impacts
- Some businesses may not be party to specific trade agreements, e.g. the UK is not a part of USMCA.
- It can introduce new trade barriers, affecting trade flows and increasing costs for businesses, e.g. trade agreements between the UK and the EU after Brexit.
- The need to comply with different regulatory standards, e.g. environmental protection and labour rights, can add complexity and costs for businesses.
- While some agreements can create jobs, others can lead to job losses if certain industries relocate to other regions.
These agreements collectively shape the global business landscape, offering opportunities and challenges for companies operating internationally.
Regulation and Protectionism
Regulation is the use of rules, incentives and penalties to change the behaviour of individuals or organisations. The government can use regulation to influence individuals and organisations’ behaviour it cannot directly control while maintaining the benefits of allowing them to operate freely within certain parameters (Institute for Government)
Government regulation plays a crucial role in protecting local industries by:
- Imposing tariffs and quotas to protect from global competition. They can limit quantities of imported goods or make them more expensive.
- Setting and enforcing laws and standards. They can ensure industries comply with labour laws and environmental regulations, which promotes fair and sustainable practices.
- Providing grants, tax incentives and subsidies. They can offer local businesses financial support to compete and grow, and they also encourage research and development.
Protectionism can also protect local industries, and it involves restrictions on trade. It can have positive and negative impacts on global trade and businesses, for example:
Positive impacts
- It can protect local industries from international competition, thus promoting stability and growth.
- It can safeguard local jobs, especially in sectors threatened by cheaper imports, such as agriculture and manufacturing.
- It can reduce dependency on volatile global markets and boost economic resilience.
Negative impacts
- It can make imported goods more expensive, thus impacting customers through higher prices.
- It can result in other countries retaliating and imposing tariffs on exports, reducing market access.
- It may lead to reduced innovation when local industries do not have to compete with international competition.
Governments must effectively balance protectionism, as too much hinders growth and too little exposes vulnerabilities and affects local industries.

Future Trends in Globalisation
As globalisation continues to evolve, it is important for businesses to be aware of future trends, such as technological advancements, sustainable globalisation and potential shifts.
Technological Advancements
Emerging technologies like Artificial Intelligence (AI), blockchain and e-commerce are playing a significant role in shaping the future of globalisation and how we connect and operate globally, for example:
Artificial Intelligence (AI) – is transforming industries worldwide and is used in various sectors, such as healthcare, finance and energy. It is also being used in retail and customer service to provide more personalised experiences. It can:
- Enhance decision-making, automate tasks and transform labour markets.
- Improve process, efficiency and productivity.
- Foster innovation.
Blockchain – is a technology that enables the secure sharing of information (McKinsey). It provides a secure and transparent method of recording and verifying data, especially in finance and supply chain management. It can:
- Streamline international trade and reduce costs.
- Reduce the need for intermediaries, e.g. an agent or broker.
- Increase trust in transactions and facilitate smoother international trade and collaboration.
E-commerce – enables online buying and selling of goods and services. It can:
- Make it easier for businesses to tap into global markets, breaking down geographical barriers.
- Allow customers to purchase goods and services from anywhere worldwide, fostering a more interconnected global economy.
- Help small and medium-sized businesses to compete globally through cross-border trade.
Further information
- Georgieva (2024) – AI Will Transform the Global Economy. Let’s Make Sure It Benefits Humanity.
- IBM – What Is Blockchain?
- McKinsey – The future of globalization: What to expect next (podcast).
- UKRI – Insights report: Innovate UK’s 50 emerging technologies.
Sustainable Globalisation
Sustainability is the ability to maintain or support a process over time (Investopedia), and its importance is growing in global business practices for the following reasons:
- It helps businesses comply with environmental regulations and avoid potential penalties, such as fines and legal issues, as many countries are implementing stricter laws.
- Businesses are becoming increasingly aware of the importance of adopting sustainable practices to help conserve natural resources, reduce pollution and mitigate climate change.
- It can benefit businesses economically, potentially attracting investors, customers and employees who prefer companies to demonstrate a commitment to sustainability. It can also save costs through efficient resource/energy use and waste reduction.
- It can drive innovation when businesses develop new products and services that are both profitable and sustainable. It can also help them compete in a global market.
- It helps businesses to have a secure future if they align with global efforts to create a more sustainable world.
Businesses are increasingly responding to global calls for environmental and social responsibility by adopting various strategies and initiatives. Here are some examples of how:
- Investments in renewable energy, energy-efficient technologies, and sustainable supply chains to reduce carbon emissions.
- Reporting energy use and carbon emissions to help businesses track and reduce their environmental impact.
- Implementing energy-efficient practices to minimise waste and reduce energy consumption.
- Promoting diversity, equity and inclusion and creating inclusive workplaces to support underrepresented groups.
- Ensuring fair labour practices and maintaining transparency in operations.
- Adopting Environmental, Social, and Governance (ESG) reporting to disclose social impact and progress towards sustainability goals.
Potential Shifts in Globalisation
Businesses should consider the potential for de-globalisation; a process of decreasing interdependence and integration between countries, leading to a more localised or regional approach to trade and economic activities. It can be influenced by:
- Political changes, e.g. trade tensions and Brexit – can lead to protectionism, increased tariffs and trade restrictions, profoundly impacting global trade. It can also disrupt trade flows and redirect investment if there are geopolitical risks and sanctions.
- Pandemics, e.g. the COVID-19 pandemic – an outbreak of infectious disease that occurs over a whole country or the world at a particular time can significantly disrupt global trade by affecting supply chains, labour availability and consumer demand. It can result in countries prioritising localised businesses rather than distant suppliers.
- Geopolitical tensions – conflicts, such as the war in Ukraine and the Middle East, can result in countries re-evaluating their trading partners based on economic and national security concerns. Conflicts can also lead to disrupted supply chains and sanctions, meaning countries look at local alternatives.
There are also shifts in global trade patterns to consider, such as:
- The growth of e-commerce – making it easier for businesses to access global markets.
- Rising emerging markets, such as China and India – are now major players in global trade, accounting for a significant share of world exports (World Economic Forum).
- The push for sustainable practices and the transition to green energy is influencing trade patterns, with a focus on reducing carbon footprints.

Conclusion
We are becoming an ever-more interconnected world with globalisation spreading businesses, ideas, cultures and innovation worldwide. Globalisation is not a new concept and has been around for a long time. However, it has rapidly evolved in the last century, especially with the rise of technological advancements.
Globalisation can bring many benefits to businesses, such as global market access, economies of scale, increased innovation and technology transfer. However, it can also be challenging, especially for smaller businesses, with increased competition, cultural and ethical considerations and economic dependency. Overall, it can impact different companies, such as MNCs, SMEs and local ones.
Many factors affect globalisation. Government and international organisations can have positive or negative impacts with their trade policies, agreements, regulations and protectionism. Future trends, such as technological advancements, the growth of sustainability practices and potential shifts in globalisation, can also affect businesses, economies and countries.
Understanding globalisation is crucial for GCSE business studies because it impacts nearly every aspect of modern business and equips students with the knowledge and skills to navigate and succeed in the interconnected business world. Think critically about how globalisation affects your local economy and future career prospects to aid in comprehending this important topic. Here are also some further reading or resources for exploring globalisation in more depth:
- BBC Bitesize – GCSE Business.
- Bizzwizard GCSE Business Studies.
- Quizlet – GCSE Business – Globalisation and Multi-National Companies Flashcards.
- Online Learning College – Globalisation.
- SaveMyExams – Globalisation – GCSE Business Revision Notes.
- Study Rocket – Globalisation.
- Tutor2u – globalisation resources.
There are also various videos and podcasts on globalisation on online platforms like YouTube.